Res-2019-030 Indirect Cost Allocation Plan

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Federal Awards Internal Control over Major Programs: • Significant Deficiencies: We reported no deficiencies in the design or operation of internal control over major federal programs that we consider to be significant deficiencies. • Material Weaknesses : We identified no deficiencies that we consider to be material weaknesses . We issued an unmodified opinion on the County's compliance with requirements applicable to its major federal program . We reported findings that are required to be disclosed in accordance with 2 CFR200.516(a). Schedule of Federal Award Findings and Questioned Costs 2017-001 Kittitas County did not have adequate internal controls to ensure compliance with federal suspension and debarment and reporting requirements. Depreciation Capital assets , which includes property, plant , equipment, and infrastructure assets, (e .g ., roads , bridges, sidewalks, and similar items), are reported in the applicable governmental or business-type columns in the government-wide financial statements . Capital assets are defined by the county as assets with an initial , individual cost of more than $5 ,000 and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed . Donated capital assets are recorded at estimated fair market value at the date of donation. Kitt itas County has elected to use the modified approach to account for the infrastructure account ; Gravel Roads, which eliminates the need to report depreciation expense. Computer Software is reported as Intangible Assets w ith a cap italization limit of $5 ,000 and is not depreciated . Capital Leases are defined as long term debt to the county . The asset is tracked but there is not value placed in the Capital Assets . Capital Leases are determined by one of the following four criteria ; 1) The lease transfers ownership of the property to the lessee by , or at, the end of the lease term ; 2) The lease contains an option to purchase the leased property at a bargain price; 3) The lease is equal to or greater than 75% of the estimated economic life of the leased property ; 4) The present value of rental and other minimum lease payments, excluding that portion representing executory costs to be paid by the lessor, equals or exceeds 90% of the fair value of the lease property . The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capita lized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of the capital assets of business- type activities is included as part of the capitalized value of the assets constructed. Property , plant , and equipment of the primary government are depreciated us ing the straight line method over the following estimated useful lives : 3